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A lien is a claim that creditors attach to your property stating that you owe them money. Before you can sell your property, your title must be clear, meaning that all creditors are satisfied and all liens removed. While most liens are on public record, filed with a county record office or state agency, some are not. In another post, we covered the most common home buying mistakes. Not knowing about property liens could certainly be added to that list. This article will discuss different kinds of liens, what right they give the lien holder, and how to protect yourself.

What Are The Different Types of Liens

Property Tax & IRS Liens

If you fail to pay your taxes, the government may place a lien on your property. Property tax liens generally take precedent before all others, meaning that they get paid first when a property is sold. Most creditors are willing to wait for a property to be sold to collect, but the government is not so patient. If you owe a substantial amount, the government may force a sale of your property. There are procedures for paying what you owe and returning to your home after the sale, but prudent practice is to pay your taxes on time and avoid these liens altogether.

Judgment Liens

When a creditor takes you to court and wins, they have the right to file a judgment lien on your property. In Texas, this lien will remain for 10 years, even if the property exchanges hands. The lien allows the creditor to collect on their debt upon the sale of the property.

Mechanic’s Lien

If you hire a contractor to perform a job and do not pay, the contractor can file a mechanic’s lien on your property. A court will have to enforce the lien, but the judgment can force you to sell your property to satisfy the creditor.

For Title Insurance in Del Rio, Texas

Bare in mind that there are some limitations on a creditor’s ability to collect on a judgment lien. Texas has Homestead Exemptions, for example, that limit the ability of a creditor to remove a debtor from her primary residence. At Southwest Abstract in Del Rio, Texas, they can tell you all about property liens and how to protect yourself from them with title insurance. Give them a call at 830-775-8508.